The term “job security” is about to be thrown around a lot. With all the economic troubles going on right now, it’s likely that increasing numbers of people will feel that their job is on the line. For HR teams everywhere, it’s vital to handle this sensitive issue correctly, for the sake of both the employees and the organization. 

What Is Job Security?

There are two types of job security – actual and psychological. 

As an example, actual job security exists for tenured university professors. This type of job security was created so that professors could pursue knowledge for its own sake. (For those who think that’s unfair, it’s interesting to note that academic tenure seems to be on its way out.) 

There are other situations where employees enjoy near-actual job security, for instance:

• Having a vital position in the company. Obviously, senior managers who are doing a good job will be among the last to be fired. 
• Government regulations that prevent layoffs of certain types. In France, for example, an employer must prove that there is a serious cause for firing a worker, and that the worker has been given every opportunity to improve through training, before notifying them. 
• Unions. There are some industries and regions where unions can prevent layoffs, even when the company can’t afford to pay everyone. 

But for most of us, the more common job security definition is the psychological one, i.e. a sense of knowing that you won’t be fired. The employee believes that they are doing work that is essential for the company, and even if others are laid off, they will remain. 

What about people who don’t have employee job security? There are many reasons why a person may suspect that their job is about to disappear. Some of these reasons are within their influence, and others are not: 

• Economic conditions 
• Lack of business success or growth 
• At-will employment contracts
• Individual performance, education, experience, and skills
• Being passed over for promotion
• Department closure
• Mergers, acquisitions, and relocations

The Current State of Job Security

At least some of the factors that contribute to job insecurity are behind a wave of firings that is sweeping many industries. Examples of the major layoff events of the past year include Citibank letting go of 20,000 employees, and Boeing firing 15,000. This trend is forecast to continue for the time being, with huge corporations expected to lay off significant percentages of their workforces. This includes Intel (15,000), Tesla (14,000; see below), and ThyssenKrupp Steel Europe (11,000).

Job Security vs. Job Stability

Job security describes how an employee feels about the chances that their current job will keep going. It is a short-term focus, and does not take into consideration what might happen to the employee five or ten years down the road. 

By comparison, job stability relates to how long an employee will stay in the same job without changes. Job stability was something that previous generations could expect, exemplified by that old cliché about getting a gold watch after spending 40 years with the same company.  

But this isn’t the case anymore. Unlike in the past, most companies fill many of their positions through external hiring. If the average employee wants to progress, they need to move companies, and that’s the end of their stability. 

Plus, the rapid pace of changing workplace skills means that workers might stay in the same jobs, but how they do those jobs will change significantly over the years. In a way, this shows how both job security and stability are related to a worker’s willingness to upgrade their skills on a frequent basis. 

In short, a stable job is secure, but not every secure job is stable. 

Why Is Job Security Important?

It is crucial to encourage a sense of job security among as many workers as possible. This is not just for the wellbeing of employees. An organization where workers feel confident in their future comes with many more valuable advantages than one where employees have no idea what might happen tomorrow. Here are some of the reasons why:

Improves Engagement

Most people who suspect that they are about to lose their job will naturally lose interest in what they are doing, and will probably start looking for something new. The saying “it’s easier to look for a job when you have a job” comes back to haunt managers and HR in this situation. According to this study, employees who lack job security tend to experience work-related stress and anxiety, which are also factors that lower engagement rates. 

Don’t forget that this is on top of the poor engagement rates that are already being seen across the board. In the era of “Act Your Wage”, many employees are dissatisfied with their conditions and showing high levels of disengagement – and this is without taking job security factors into account. 

On the other hand, promoting job security has a significant impact on engagement. According to the NCBI, more than 85% of job-secure workers are engaged. Meanwhile, for those with an uncertain future, all is not lost, as managers can play an important role in reducing the effect of job insecurity. Managerial support for job-insecure workers increases the chance that these employees are engaged by 13%.

Increases Productivity and Retention

Having engaged workers is not the same as having productive workers. Engagement can be defined as the “emotional connection between workers and their job, coworkers, and organization.” Employees might love your company, but the stress of layoffs can wreak havoc on their productivity. 

Job insecurity is contagious. Whenever there are layoffs, or even suspicions about them, the first question on everybody’s mind is “am I next?” This can result in:

• Time lost due to gossiping and managers needing to calm everyone down
• Low well-being in the form of stress that causes lack of concentration, sleep deprivation, and frayed tempers
• Distrust of management based on the assumption that the people lower in the hierarchy will be the first to go 

If layoffs actually happen, then even the most engaged workers might have a tough time of it. Downsizing affects morale and organizational culture. On a material level, it can take a while to organize replacements for the tasks that former employees used to do. At least in the short term, remaining workers will need to do more than their usual share and take on additional responsibilities. 

But when job security is instilled in your people, productivity will benefit. Employees who believe that they are safe for now will participate in career development opportunities. Workers like these will see that, by investing their effort today, they will still be employed tomorrow so as to use their new skills. 

It’s a similar story with retention. A Gallup study found that initiatives that improve job satisfaction and security, such as an employee recognition program, result in an almost 50% greater chance that employees will still be retained after two years. 

Lowers Expenses

When companies start to look at firing people, it can have unintended consequences. Ironically, it’s often the most talented workers who act first when layoffs are in the air. With great workplace skills to offer, your best people could find it easiest to arrange for new jobs. 

As the worry spreads, additional employees will start looking, which can result in a sudden upsurge in voluntary quits.  

Replacing those workers will be more difficult than expected. If word gets out that your company is examining layoffs, or is having trouble staying in business, then people will be reluctant to join you (not to mention how this affects business sales and profits). Nobody wants to get hired by an organization, tell all of their prospects that they are off the market, and then be back on the streets a short while later.  

Help Employees to Help Themselves

As we’ll get into, there are many things that the human resources department can do to both prevent and minimize the effects of job insecurity. But workers have even stronger reasons to give themselves a better chance for survival. And these ideas for employee growth really have no downside. By pursuing professional development opportunities, a worker will either enhance their profile and show themselves to be indispensable, or be prepared in a worst-case scenario if they need to search for a new job. Here are some ways for employees to boost their job security:

Upskill Independently

Online courses, post-secondary part-time studies, and even professional literature are all ways for employees to learn more about their role and industry on their own time. To this end, there is an amazing assortment of free material out there, including a variety of business courses from Harvard University. 

Internal Community Forums

Every company has a group of employees who have the experience and the interest to effectively support each other. Whether it’s information about internal job openings, new L&D courses, or survival secrets, internal community forums, organized with the approval of management, are a great way to share knowledge and increase job security. (Note that this is different from Employee Resource Groups, which are usually connected to DEIB issues in a company.)

Proactive L&D and Planning

HR might be doing a great job at career management, and employees who take an active role in this process can only make it better. When an employee approaches you about career pathing and how to achieve their professional goals, you can be more certain that they will work hard to gain skills and be ready to take on more responsibilities. 

Manager Input

Direct managers are often the best informed when it comes to the performance and skill needs of workers. As experienced employees themselves, a manager might also know about opportunities for upward mobility and workplace training in the same spirit as an internal forum. The trick for HR is to encourage managers to make time for discussing job security issues, and ways to enhance it, for any employee who is interested. 

In general, HR’s role is to explain these initiatives to employees, even before there is a notion of layoffs, so that workers can be prepared in any situation. Don’t forget to emphasize work-life balance in case the employee starts to spend too much time in these activities.     

How to Actively Handle Job Security Issues

Let’s face it: some issues are beyond the control of HR, management, and even the entire organization. So it’s the task of HR and managers to minimize the effect of job security challenges. Here are just some of the ways you can do so:

Be Transparent

Rumors can be more damaging than the truth. When there is no clear idea of what’s actually going on in a company, employees will assume the worst. 

A good manager will meet frequently with employees. If they mention possible layoffs, it’s time to act. Explain the situation to upper management and encourage them to make a statement. Tell employees about your take on the situation, and invite them to discuss their concerns in a controlled environment, such as a forum, to keep rumors to a minimum. Manage your worker’s expectations by staying on top of the big picture and keeping them updated.   

Continue to Promote Internal Mobility

Remember that job security is a sense of knowing that you won’t be fired. One of the “hints” that a worker might be cut is that they are passed over for promotion. In these situations, it is often the case that a worker who has been with the company for a long time has a relatively high salary compared to peers. If they are not going up, then management might want them out, because they are expensive. But why have they been refused a promotion? It could be that the above-mentioned preference for external hiring is to blame. 

For many reasons, using existing workers to fill openings is a good idea. Avoiding job security concerns by enabling employees to climb the corporate ladder is yet another one. 

Act as an Advocate for Rationality

It has to be said: sometimes, leaders panic. And a common reaction is to get out the chopping block.

But one mistake that companies make during times of economic pressure is that they let too many people go. The loss of skilled workers makes it even more difficult to function in an already difficult situation.

It’s called dumbsizing, and there are plenty of examples of it. One is Tesla, who fired 500 workers from its supercharger division, including the department leader. Within a week, all of those employees were rehired, as Tesla quickly (and bizarrely) discovered that it could not manufacture cars without superchargers. 

HR can reduce the number of layoffs by mentioning similar examples. But they can also ask essential questions such as, “how can we survive without our top people?” The catch here is to make sure that employees are the best that they can be, and that relies on skills. 

Provide Learning and Development Opportunities

If there’s such a thing as a “cure-all” for job security, it’s L&D. For various reasons, building the highest possible level of skills within a company often creates a sense of job security. Not to mention the boost it gives to employee satisfaction, engagement, and retention. And if worse comes to worst, having those enhanced skills will give your employees a better future, even if that will be outside your organization. 

Every company faces its own set of circumstances. But one major reason for loss of job security is the effect of competition. Using L&D programs today can have an immediate effect on productivity and make the company more competitive. 

There are even specific types of skills that will enable your company to weather the storm with a minimum of layoffs. Change management skills allow organizations to take drastic actions in the most rapid and effective way possible. In addition, it’s often adaptive leadership that provides the ability to make such changes. Their effect will be enhanced if more employees are also trained in adaptive skills.

Finally, employees who are actually terminated will have the confidence, and the capability, to quickly find new jobs – if they have the right skills. Providing these opportunities is the result of HR/L&D activities, including career management, keeping track of the market’s most useful skills, and continuous professional development.   

Feel More Secure in Your Job with Growthspace

To make the best of a bad situation means protecting both your organization and your employees. Perhaps you can’t control the economy, but you can increase the resilience of your people: and that means skills. With Growthspace’s precision skill development platform, companies deliver exactly the courses that are needed to enhance competitiveness and prepare employees for the future.